Budget Information

Democrats Appear Unified Behind Budget Plan - June 11, 2012

DearColleagues,

It appears that both budget committees will convene tomorrow to take action on a legislative package agreed to by Democratic leadership in both houses. At this time, it's unclear if the governor has signed off on the package. That said, it generally reflects the governor's proposal, although makes $500 million less in overall cuts, leaving a smaller state budget reserve. Rejected cuts include those the Cal Grant program that would have significantly hurt community college students.

For community colleges, the plan largely reflects the governor's January proposal, as amended by the May Revise. If the governor's compromise tax measure passes, $313 million would be available to buy down the inter-year deferral. If it fails, community colleges would have a "trigger cut" of $286.5 million--likely leading to a workload reduction of 6.156%.

Community college advocates achieved a significant victory with language that ensures a backfill of up to $200.9 million should redevelopment agency liquid assets not be redirected to community college districts. However, there are still significant risks in both the current (2011-12) and budget (2012-13) years for the redirected property tax increment funds from redevelopment agencies.

While the League and other system advocates had originally hoped for a "positive trigger" of money for student access and success, enthusiasm cooled when the Department of Finance's cash-flow plans were leaked. With none of these funds available until June 2013, it makes the most sense to use them for deferral buydown and thus doubling the amount of funds available in 2013-14.

We expect both budget committees to adopt the plan tomorrow and for it to be on the Assembly and Senate floors on Friday, for a vote before the constitutional deadline.